Real GDP decreased at an annual rate of 0.3% in the first quarter of 2025, according to the “advanced” estimate released by the Bureau of Economic Analysis. Real GDP increased 2.4% in the fourth quarter of 2024.
The decrease in real GDP in the first quarter primarily reflected an increase in imports, which are a subtraction in the calculation of GDP, and a decrease in government spending. These movements were partly offset by increases in investment, consumer spending, and exports. Compared to the fourth quarter, the downturn in real GDP in the first quarter reflected an upturn in imports, a deceleration in consumer spending, and a downturn in government spending that were partly offset by upturns in investment and exports.
Personal consumption added 1.21 percentage points (pp) to growth, following a 2.70 pp addition in the fourth quarter of 2024. The increase in PCE was driven by services (1.10 pp) such as those in household consumption expenditure: healthcare (0.46 pp), housing and utilities (0.41 pp), and other services (0.31 pp). Goods added (0.11 pp) to real GDP, with durable goods subtracting (-0.26 pp) driven by motor vehicles and parts subtracting (-0.26 pp). Nondurable goods added (0.37 pp) with food & beverages purchased for off-premises consumption (0.13 pp) and clothing and footwear (0.12 pp).
Business investment added 3.60 pp to real GDP. Non-residential fixed investment added 1.29 pp, with structures added 0.01 pp. Equipment and transportation equipment added 1.06 pp and 0.15 pp, respectively. Information processing equipment added 0.96 pp, and other equipment subtracted 0.04 pp. Residential fixed investment added 0.05 pp.
Government spending subtracted 0.25 pp to real GDP. The Federal government subtracted 0.33 pp to real GDP while state and local added 0.08 pp.
Net exports had a significant effect on real GDP, subtracting 4.83 pp to growth. Exports added 0.19 pp after subtracting 0.01 pp in the fourth quarter, while imports subtracted 5.03 pp to real GDP after added 0.27 in the fourth quarter.
Read the BEA release.
